It's Friday, so the long view. Behind most of the deal announcements and the press releases lies a single question: when the good oncology assets all draw the same crowd, how do you win one without overpaying? Bayer set out the answer in a recent conversation with Scrip, and it starts long before there is anything to bid on.
Deepa Talpade, who runs oncology business development, licensing and alliance management at Bayer, described the moment an asset becomes irresistible. It turns the corner on clinical data, the efficacy and safety start to look decent, and then, she said, "all the oncology companies are lining up for those assets." That is the room Bayer would rather skip. By the time an asset is that legible, the price usually reflects it.
So Bayer's play is to arrive early. Not just as in Phase I rather than Phase III, though that too, but early enough that there isn't even a defined asset, and the relationship is the only thing on the table.
The Long Courtship
That is the logic of Bayer Co.Lab, the incubator program run by Friedemann Janus. The model is no-strings-attached, as Bayer phrases it. Janus called it a way to "get to know these really cool companies very early on and much deeper," close enough that, in his telling, "we're much closer to them than anybody else." Co.Lab now runs five sites: one next to Bayer's pharmaceuticals campus in Berlin, one in Cambridge, Massachusetts, and three across Asia in Kobe, Shanghai and Beijing. A lighter-touch version, Co.Lab Connect, offers mentoring and time with Bayer scientists to start-ups in cities without a physical site, beginning with Seoul and Basel.
Start-ups are picked by teams drawing on Bayer, its subsidiaries and its Leaps by Bayer investment arm, against a simple test: the science excites Bayer, and the start-up is working in an area that could make it a partner "one, two years down the road," as Janus put it. The generous part, and the shrewd part, is that a no is not an ending. Talpade pointed to the serial entrepreneurs who cycle through: "You may not succeed with this specific [start-up], but now you have that connection that they will come back and chat with you about the next idea." That no-strings posture has a return Bayer does not spell out: option value, first look at the next venture.